Logistic Real Estate Segment Note Under Pressure, looking for bright spots under the sun
We don't know what the European economy will look like over FY23-24. Our best guess is a mild recession that lasts about 12-18 months. We believe this or even worse scenario has already been priced into logistic real estate stocks that roiled the markets as soon as interest rates increased. The segment is perceived as more cyclical than other segments like Health Care or Residential REITS, while Retail benefits from the post-COVID normalisation. We favour hard-hit VGP and CTP most in our logistic Real-Estate universe as we look beyond the recession and focus on some long term trends :• Inflation cools down, we already see oil prices fall below pre-war levels and supply chain issues ease.
• Lower inflation and slower growth convinces central banks not to crank interest rates further.
• The incurred inflation can be passed on to tenants as demand/supply balance remains healthy.
• A “Europe first” industrial policy in Renewables, Defence, Technology, …. stimulates investment.
• This also leads to more Re-, Near-, Friend-shoring of production and inventories in West-EU and CEE.
• Sustainability targets and energy costs favour investments into higher BREEAM certified buildings.
• “Energy as a business” from solar polar becomes a separate business unit with its own financial merits.
• E-Commerce demand stabilises in a Post-COVID normalisation environment, CEE build-out continues
• The spike in construction costs over '22 reverses into a decline as construction order books empty.
• In NL specifically, the stringent construction norms will lead to lower supply and support rent levels.
Intervest Offices & Warehouses is a Belgian property investment fund. Co. specializes in investments in office buildings and semi-industrial properties situated on locations outside municipal centres. Co.'s business properties are located on the Antwerp-Brussels axis. Its activities can be divided into two business segments: Offices segment which includes the properties that are let to companies for professional purposes as office space; and Semi-industrial buildings segment which includes those premises with a logistical function, storage facilities and high-tech buildings. At Dec 31 2010, Co.'s portfolio consists of 69% in offices buildings and 31% in semi-industrial buildings.
Montea Comm VA, formerly Montea CVA, is a Belgium-based real estate investment trust specialized in logistics and semi-industrial real estate in Belgium, the Netherlands and France. The Company's property portfolio represents approximately a surface of 584,694 Square meters (m2) across 37 sites. Its group companies include, among others, Montea Management NV, Montea Comm. VA, Acer Park NV, Montea Nederland NV, Montea Almere NV, Montea Rotterdam NV, SCI Actipole Cambrai, SCI Sagittaire, SCI Saxo, SCI Sevigne, SCI Socrate and SCI 3R. In addition, the Company also partners with Decathlon.
VGP NV is a Belgium-based real estate development company that constructs and develops industrial real estate and ancillary offices, which are rented out to clients on long term lease contracts. The Company operates in three business segments: the Development activities segment is focused on the identification and acquisition of the land and development of the infrastructure, the design of buildings, the coordination of architectural and engineering aspects, the administration to obtain the necessary permits, the tendering and coordination of the construction works, including site management, and the facility management of the real estate portfolio; the Property Management and Leasing services segment is responsible for managing the operation of the buildings, and the Facilities Management services segment is responsible for managing the operation of the buildings and performs all actions, such as maintenance services, waste management services and maintenance greenery, among others.
Warehouses De Pauw and its subsidiaries are engaged in investment in the Belgian semi-industrial property market. Co. is a closed-end property investment company which specializes in: development of storage and distribution premises; customized projects in line with the user's request; acquiring premises for customers who wish to engage in sale and leaseback transactions.
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